Estia occupancy hit by aged care inquiry coverage

Estia Health shares slip to nine-month low after poor press from aged care royal commission hurts occupancy rates.

An Estia Health aged care home. Picture: AAP

Estia Health shares have slipped to a nine-month low after the nursing home operator said poor press from the aged care royal commission had hurt occupancy rates.

Estia said spot occupancy had slipped 0.6 per cent across its 6000-bed portfolio since August to 93.5 per cent, reflecting “current sector dynamics and public sentiment.”

Estia said it did not expect the mood to improve in the short term. The company’s shares lost 9.02 per cent in the first 15 minutes of trade on Monday to hit $2.42, the lowest since mid-March.

The interim report from the Royal Commission into Aged Care Quality and Safety in October described the nation’s aged care system as being in a “shocking tale of neglect” following evidence of widespread mistreatment and substandard care.

Estia said in August it had spent $1.7 million responding to the inquiry and said it was well positioned to respond to any new quality standards the commission might recommend.

The company kept its full-year profit flat amid what executives called one of the sector’s most difficult periods ever, with chief executive Ian Thorley calling for widespread reform rather than just better regulation.

In addition to Monday’s occupancy hit, Estia said revenue had been affected by the reduction in the maximum permissible interest rate and competitive pressures.

Overall costs remain in line with expectations, but full-year earnings from mature homes on a like-for-like basis is expected to dip from $86.6 million to between $78 million and $82 million, pre-lease calculations.

AAP